Asset Sensitivity
A balance-sheet configuration in which a banks assets reprice faster than its liabilities when interest rates change. An asset-sensitive bank earns wider net interest margins when rates rise (because loan yields and securities yields lift quickly while sticky deposit costs lag) and suffers when rates fall. Most US regional and community banks are structurally asset-sensitive because they fund mostly with deposits (slow to reprice) and lend mostly with floating-rate loans or short-duration fixed loans (quick to reprice).
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